From voice to broadband: FCC redirects its $8.7B in phone bill fees

Can the Federal Communications Commission save a huge government program that overpays carriers to provide old school phone service, overtaxes subscribers to subsidize it, discourages modernization, and doesn't even offer broadband to the low income and rural consumers it purports to serve?

Yes it can, insists FCC Chair Julius Genachowski.

The Commission's $8.7 billion Universal Service Fund and Intercarrier Compensation system was designed "for a world that no longer exists," Genachowski told the Information Technology and Innovation Foundation on Monday. The USF was created "for a world with separate local and long-distance telephone companies; a world of traditional, landline telephones before cell phones or Skype; a world without the Internet."

"Some say if USF is broken, we should eliminate it altogether," he continued. "I reject that idea. While the world has changed, the importance of universal service to our connectivity and competitiveness has not."

Tomorrow the FCC will propose massive changes to the USF program at its Open Commission meeting. Here are the details, along with our interview with Genachowski about the USF's future.

Millions bypassed

The Universal Service Fund tithes your phone service and uses the money in a variety of ways, subsidizing low income consumers and rural carriers, and providing schools and libraries with money for network connectivity.

But the program does all this with breathtaking inefficiency. It taxes consumers for "long distance" telephone calls, still presumed to be more expensive than local service, even though IP telephony has made this distinction irrelevant. As subscribers make fewer, old-school copper wire long distance calls, the USF must hike its base percentage to compensate for the shortfall in revenues.

And thanks to a bizarre funding formula, in some areas USF pays $20,000 a year for households to get phone service. The USF's "high cost" fund puts millions of dollars into regions where non-subsidized carriers already provide connectivity. Or the system subsidizes multiple carriers to provide service to the same areas, such as a region of Mississippi where, in 2009, no less than 13 carriers all received high cost cash.

Mostly importantly, the USF doesn't subsidize broadband service, to which every form of electronic communication is now migrating—something noted in the heartstring-pulling section of Genachowski's speech.

"We simply can't let millions of Americans be bypassed by the broadband revolution," he declared. "Americans like the 17-year-old girl in Alachua County, Florida who's doing her homework in the parking lot of the local library at night, because her family can't get broadband at home and the library's hot spot is her only option."

The big fix

Most agree it would be a grand thing if the USF were rerouted toward broadband—enticing the estimated 30 million Americans who can't or don't go online to explore the joys and necessities of cyberspace.

So last year the FCC's National Broadband Plan outlined some key reforms. First was the creation of a "Connect America Fund" to support broadband providers for poor and rural regions. The CAF will only subsidize providers in zones "where there is no private sector business case to provide broadband and high-quality voice-grade service." The program will only fund one provider per area. Its recipients will be adequately audited (one hopes). And, of course, they will have to provide broadband.

Second, the FCC wants Congress to authorize a "mobility fund" to help various states get up to speed in 3G wireless.

The Connect America Fund will be subsidized in part by a reform of the FCC's Intercarrier Compensation system, in which the big carriers pay smaller providers to complete phone calls to rural areas. Per-minute calling compensation rates will be dropped—reducing carrier incentives to stay with old technology. Shenanigans like "traffic pumping"—offering chat room services or other gimmicks that "stimulate" calling to a rural region in order to get intercarrier comp cash—will be stopped.

Much of this money will be gradually transitioned to ISP services. It would help, the NBP noted, if Capitol Hill could kick in some "optional public funding" for the Connect America program, "such as a few billion dollars per year over a two to three year period" to smooth out the process.

Whether that can happen with this hyperpolarized Congress is unclear. But the FCC says it wants to get this whole business done by 2020, with reforms of High Cost and disbursements from Connect America both beginning in 2012.

On Tuesday the FCC will vote to implement these new programs, launching the Connect America fund and tackling all these tough High Cost and Intercarrier Comp issues.

Bring us your proposals

We had the chance to speak briefly with FCC Chair Genachowski this morning about the plan.

Ars Technica: In your speech, you challenged critics who call for USF ISPs to provide "the highest speeds technically possible" to "bring us your proposals." Would you expect USF ISPs to offer speeds adequate enough to watch, say, Netflix on Apple TV?

Julius Genachowksi: It's a good question. It's something that we thought about in the context of the National Broadband Plan. At the time the definition of broadband was 768Kbps. Other countries that have looked at this for purposes of broadband funding have said 1Mbps or 2Mbps. And we looked at it and we looked at the kinds of functionalities in the near term that should be included—video conferencing for businesses and distance learning and remote diagnostics. And that's what informed the 4/1 proposal [4Mbps download/1Mbps upload] in the National Broadband Plan for the initial minimum speed for the purposes of USF and so it does reflect that kind of thinking.

Ars Technica: Is that a yes for Netflix and similar offerings?

Genachowski: Well, they'd be able to do what you can do with 4Mbps down and 1Mbps up. And the things that we focused on in the National Broadband Plan were things that small businesses can do and students can do and doctors and patients can do. A lot of it involves having basic video over broadband.

Ars Technica: Do you think that wholesale broadband line sharing would help accomplish some of the goals outlined in your USF plan?

Genachowski: I think that the data speaks for itself. And the data says that the demand is very rapidly outstripping the supply, not by a little bit, but by a lot. And if we don't act, we'll run into a spectrum wall. Obviously it takes a little bit of time from the time that you start doing spectrum reform to the time that it becomes available. So running out of spectrum tomorrow isn't the issue. We're looking at trends over the coming years. And the trend is very worrisome, and I think that there's broad agreement about that.

And the idea of incentive auctions is about bringing market incentives into the use of existing spectrum. And if we can do that, ultimately the market will be the judge of appropriate spectrum allocation.

Ars Technica: You argue that the FCC needs to discourage "traffic pumping." At least one former FCC economist argues that access stimulation is a good way to fund telecom services in remote areas.

Genachowski: I think that our policies to promote Universal Service in remote areas should be transparent, efficient, and market based. I think there's widespread agreement that traffic pumping isn't a transparent way to support it in rural areas.

Ars Technica: Do you think that Congress will help the FCC with the Connect America fund? Any optimism here? It's a pretty tough Congress, I'd imagine you'd agree.

Genachowski: As I said in my speech, we're really open to all ideas that would speed this transition.

Matthew Lasar
Matt writes for Ars Technica about media/technology history, intellectual property, the FCC, or the Internet in general. He teaches United States history and politics at the University of California at Santa Cruz. Emailmatthew.lasar@arstechnica.com//Twitter@matthewlasar

74 Reader Comments

Why does AT&T still charge outrageous fees for long distance service if you don't purchase one of their plans?I think the problem has more to do with private industry than government. Its the industry that still wants us to live in the dark ages and paying dark ages fees even though its all the same bytes flying across the networks.

I think the problem has more to do with private industry than government. Its the industry that still wants us to live in the dark ages and paying dark ages fees even though its all the same bytes flying across the networks.

Are you suggesting that you do not have options to wade away from conditions, or that the industry is collisional to the extent that moving serves no benefit?

The Universal Service Fund is and always has been a "giant subsidy," but one that is necessary. There simply isn't competition among communications service providers in rural America (fixed or mobile) and that is the only justification the FCC needs to implement its plans.

The "pack it up" attitude is shortsighted and narcissistic. Communications infrastructure is the foundation of democracy, education, and community.

You're right. If you live in a rural area and want usable internet, better pack it up, folks. That fiber in the ground isn't free, you know.

Maybe we should provide subsides so people living in rural areas can watch Broadway shows. Theaters for everyone! Before there was internet, or phones or radio, there was newspapers. But you didn't see the Congress of 1796 putting a tax on papers so as to enable subsidized delivery to the middle of nowhere.

If you want to live like an urban dweller live in an urban area. If you choose instead to go for rural living don't bitch about the trade-offs you have chosen.

Would it not be better to change the subsidy from being ISP based to rural hick based? That way the market has a shot at picking up subsidized hicks for their new cheaper service and making this a bit more competitive and future proof?

Maybe we should provide subsides so people living in rural areas can watch Broadway shows. Theaters for everyone! Before there was internet, or phones or radio, there was newspapers. But you didn't see the Congress of 1796 putting a tax on papers so as to enable subsidized delivery to the middle of nowhere.

If you want to live like an urban dweller live in an urban area. If you choose instead to go for rural living don't bitch about the trade-offs you have chosen.

Exactly. Living in a rural area with urban infrastructure is a luxury that urbanites should not be subsidizing. If you live in the sticks and broadband really is worth the cost of laying the lines, pay up or move.

Maybe we should provide subsides so people living in rural areas can watch Broadway shows. Theaters for everyone! Before there was internet, or phones or radio, there was newspapers. But you didn't see the Congress of 1796 putting a tax on papers so as to enable subsidized delivery to the middle of nowhere.

If you want to live like an urban dweller live in an urban area. If you choose instead to go for rural living don't bitch about the trade-offs you have chosen.

Only a conservative New Yorker would attempt equate the value of Broadway shows to universal broadband service, then then support their argument with an erroneous example circa 1796... meshuge...

The sad fact is that rural Americans don't have the ability to leave rural America. Sure, they can catch a bus to New York City and sleep in a homeless shelter, but they can not live. Most were born to poor, illiterate families and so far, the government has miserably failed to break the cycle. Legitimate broadband - more than public schools, more than welfare - gives rural Americans the opportunity to independently create knowledge and wealth.

I'm sure you're comfortable in your walkup, sitting on your high design couch, behind your Apple tapped into fiber, streaming live concerts from the Met in HD. And please, by all means, do enjoy the fruits of your fathers labor, but don't presume you know what its like to live under any other circumstance.

Exactly. Living in a rural area with urban infrastructure is a luxury that urbanites should not be subsidizing. If you live in the sticks and broadband really is worth the cost of laying the lines, pay up or move.

The sad fact is that rural Americans don't have the ability to leave rural America. Sure, they can catch a bus to New York City and sleep in a homeless shelter, but they can not live.

And what about the urban poor already living in NYC homeless shelters? Are they somehow less deserving? We should provide broadband to the rural poor before housing to the urban poor? In any event there are plenty of urban areas that have a cost of living as low (lower if you discount the implicit and explicit subsidies) as rural areas. Hell, they can move to Detroit.

Quote:

Most were born to poor, illiterate families and so far, the government has miserably failed to break the cycle.

A) The literacy rate in the U.S. is > 99%B) The government isn't responsible for "breaking the cycle" and even if it were plenty of people managed to get out of it. Where do you think the Joads' descendants would be living today? American history is essentially one of increased urbanization.

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Legitimate broadband - more than public schools, more than welfare - gives rural Americans the opportunity to independently create knowledge and wealth.

Who cares? Let them move to the city and create knowledge and build wealth. Or let them continue stubbornly rotting out in the middle of nowhere.

Quote:

I'm sure you're comfortable in your walkup, sitting on your high design couch, behind your Apple tapped into fiber, streaming live concerts from the Met in HD. And please, by all means, do enjoy the fruits of your fathers labor, but don't presume you know what its like to live under any other circumstance.

Exactly. Living in a rural area with urban infrastructure is a luxury that urbanites should not be subsidizing. If you live in the sticks and broadband really is worth the cost of laying the lines, pay up or move.

If they aren't willing to pay disproportionately much to support disproportionate infrastructure, they should either live without electricity or move to denser areas. I don't ask others to support my life choices and they shouldn't either.

The sad fact is that rural Americans don't have the ability to leave rural America. Sure, they can catch a bus to New York City and sleep in a homeless shelter, but they can not live.

And what about the urban poor already living in NYC homeless shelters? Are they somehow less deserving? We should provide broadband to the rural poor before housing to the urban poor? In any event there are plenty of urban areas that have a cost of living as low (lower if you discount the implicit and explicit subsidies) as rural areas. Hell, they can move to Detroit.

The irony here is that NYC in general has some pretty shitty broadband choices even though it is a huge urban center. A friend of mine recently started having to work from home and his two options are DSL at about 1.5/384 or TimeWarner cable, which becomes useless in the evening. No fiber anything. No FiOS, and unlucky enough to not be in an Optonline area.

Also it should be noted that moving to Detroit would be much like living in a rural area since it's gone all "urban prairie".

It's amusing how the argument here is rabid-libertarian vs. socialist rather than doing anything about jailing whoever has allowed the telcos to basically steal billions of dollars legally each year. If there's a middle ground it must lie somewhere in decreasing the subsidy that's collected and exponentially increasing the efficiency in how it's spent.

That said, I'm not a big fan of that whole "we need the internet to make people smarter" argument. It's already as much of a wasteland as TV is to the vast majority of mouth breathers. And libertarians take note - sometimes poor simply is coupled with stupid. It's all well and good that you're intelligent (although not terribly pragmatic it seems), but the libertarian utopia never really takes into account that perhaps the "pulled themselves up by the bootstraps" people have a certain intelligence the "stuck for life in the trailer park" people may not have.

Maybe we should provide subsides so people living in rural areas can watch Broadway shows. Theaters for everyone! Before there was internet, or phones or radio, there was newspapers. But you didn't see the Congress of 1796 putting a tax on papers so as to enable subsidized delivery to the middle of nowhere.

If you want to live like an urban dweller live in an urban area. If you choose instead to go for rural living don't bitch about the trade-offs you have chosen.

Exactly. Living in a rural area with urban infrastructure is a luxury that urbanites should not be subsidizing. If you live in the sticks and broadband really is worth the cost of laying the lines, pay up or move.

Okay, then we should have said the same thing back when telephone lines were being strung everywhere, when power lines were being put everywhere, etc.

After reading some more of your posts, you appear to be an idiot who thinks "I's got mines, I don't wanna help anyone else! They's can dies for alls I cares!"

Do you not see that there is NOT ANY DIFFERENCE between those things and putting broadband 'out in the sticks'?

If they aren't willing to pay disproportionately much to support disproportionate infrastructure, they should either live without electricity or move to denser areas. I don't ask others to support my life choices and they shouldn't either.

You should know its not about choice. If the local telco decides the lines in the ground aren't suitable for DSL and it would cost too much to replace them, too bad. Cable is a technology that was designed for urban areas and isn't applicable to rural areas due to the total lack of infrastructure. This leaves expensive as hell, slow satellite that people do, in fact, choose to pay for. It's like cultivating a Digital Divide right within our own country.

That said, its not the small towns that have a telco coop that are in the cold. It's the areas that are unlucky enough to be served by the likes of Qwest who doesn't see an ROI good enough for the stockholders whereas the coops have to consider the interests of the locals. Free market forces "at work" in a environment that harbors monopolies...

And of course they support your life choices by paying taxes that get redistributed to public transportations systems they are unlikely to ever use, etc. Roads they'll never drive on, etc. Those Beltways and eight lane superhighways are free.

Really, it's pretty astounding that given how large of a part of agriculture is in our economy we just expect people to live in huts and send letters (oh yeah, they shouldn't have the Post Office out there either, given that it is likely much more expensive relative to an urban solution...) as part of their "sacrifice" of remaining part of the agricultural community that helps to keep the rest of us enjoying cheap and abundant food.

First, do we really know how much of the money collected actually goes to what it is supposed to? The government has a long and distinguished history of collecting money for something and then paying out 20-40% on what is collected.Second for those against this plan, are you also adverse to the inner city getting subsidized cable with tax dollars?

Really, it's pretty astounding that given how large of a part of agriculture is in our economy we just expect people to live in huts and send letters (oh yeah, they shouldn't have the Post Office out there either, given that it is likely much more expensive relative to an urban solution...) as part of their "sacrifice" of remaining part of the agricultural community that helps to keep the rest of us enjoying cheap and abundant food.

Just how large a part of our economy is agriculture net of government subsidies? Also, it is the rural politicians that are preventing us from enjoying cheap and abundant food by setting up ridiculous trade barriers.

Try again. Hint: the next argument is typically about agriculture being a national security issue.

"Green" is just a term used to fleece taxpayers for some privileged group's benefit. It should be noted that subsidies always distort the market in an adverse way. Subsidies never create jobs, they consume jobs.

Subsidies take good money that would otherwise be invested or spent in a natural efficient manner to benefit us, our economy, and our society, and instead consumes it on an inefficient pet project created by a group of politicians attempting to social engineer our behavior in some manner they deem preferable!

Therefore, subsidies consume good money on inefficient projects that would otherwise not exist. These projects will not provide a positive return on investment to society. They add nothing to our country's net worth and actually reduce it. Subsidies hide, or mask, money losing enterprises for some supposed social benefit of return that politicians deem preferable over the economic reality. Subsidies are luxuries we no longer can afford!

Bottom line, all these windmills, among other subsidized things, are costing us economic growth and jobs! I would say the evidence clearly supports this fact.

Good luck getting any ISP in the US to agree to broadband line sharing.

Which is why is should be made mandatory.

newwb wrote:

Exactly. Living in a rural area with urban infrastructure is a luxury that urbanites should not be subsidizing. If you live in the sticks and broadband really is worth the cost of laying the lines, pay up or move.

You also realize that those that live outside the urban areas pay taxes that go to the urban areas. Why should they have to pay taxes to help subsidize your city living?

If they aren't willing to pay disproportionately much to support disproportionate infrastructure, they should either live without electricity or move to denser areas. I don't ask others to support my life choices and they shouldn't either.

If you want to live like an urban dweller live in an urban area. If you choose instead to go for rural living don't bitch about the trade-offs you have chosen.

Not everybody chooses where they live.

newwb wrote:

If they aren't willing to pay disproportionately much to support disproportionate infrastructure, they should either live without electricity or move to denser areas. I don't ask others to support my life choices and they shouldn't either.

I suppose the steel that was used to build your building, or the wood, or the stone, was all produced locally (or from local raw materials)? Where's your power come from? If in the U.S., probaby largely from coal, which I assume is mined from your back yard, and burned down the street? Or perhaps oil from the well across town? Or from a wind farm, that's located within city limits and made from that same locally-produced steel? And obviously you grow all your own food.

Guess what: this is the people of rural America, who you absolutely depend on for nearly every aspect of your lifestyle, increasing the price of the services they provide to you. Or do you really expect them to live in the dark, and in the dark ages, so that you can enjoy modern urban life?

newwb wrote:

Exactly. Living in a rural area with urban infrastructure is a luxury that urbanites should not be subsidizing. If you live in the sticks and broadband really is worth the cost of laying the lines, pay up or move.

It still wouldn't be "urban infrastructure." It'd just be "not third-world infrastructure."

iamwhoiam wrote:

You also realize that those that live outside the urban areas pay taxes that go to the urban areas. Why should they have to pay taxes to help subsidize your city living?

Not really...both on a national scale, and within every state, rural areas are net receivers of tax funds. Beltways, subways, and the like are expensive, but higher population density makes them cheaper per person that most rural roads. Same for libraries, schools, etc.

Urban taxpayers have always, and will always, subsidize rural areas; as well they should, because like I said, those skyscrapers didn't sprout out of the ground, and don't light themselves.

I suppose the steel that was used to build your building, or the wood, or the stone, was all produced locally (or from local raw materials)? Where's your power come from? If in the U.S., probaby largely from coal, which I assume is mined from your back yard, and burned down the street? Or perhaps oil from the well across town? Or from a wind farm, that's located within city limits and made from that same locally-produced steel? And obviously you grow all your own food.

Guess what: this is the people of rural America, who you absolutely depend on for nearly every aspect of your lifestyle, increasing the price of the services they provide to you. Or do you really expect them to live in the dark, and in the dark ages, so that you can enjoy modern urban life?

I expect them to pay for themselves, and where necessary pass along the costs to the consumer of the products they produce. Then I can choose to either buy those goods from them or buy them from abroad (which in most cases would be cheaper absent trade barriers - another form of rural welfare.)

I suppose the steel that was used to build your building, or the wood, or the stone, was all produced locally (or from local raw materials)? Where's your power come from? If in the U.S., probaby largely from coal, which I assume is mined from your back yard, and burned down the street? Or perhaps oil from the well across town? Or from a wind farm, that's located within city limits and made from that same locally-produced steel? And obviously you grow all your own food.

Guess what: this is the people of rural America, who you absolutely depend on for nearly every aspect of your lifestyle, increasing the price of the services they provide to you. Or do you really expect them to live in the dark, and in the dark ages, so that you can enjoy modern urban life?

I expect them to pay for themselves, and where necessary pass along the costs to the consumer of the products they produce. Then I can choose to either buy those goods from them or buy them from abroad (which in most cases would be cheaper absent trade barriers - another form of rural welfare.)

Except that they don't have the economic power to pass those costs along; the corporation that owns these activities (mines, mills, etc.) will almost certainly be headquartered in a nearby metro area, and the people in charge of it enjoy the same luxuries you do...so they don't care. And if you further cut off educational opportunities, you pretty much guarantee it stays that way. Which works for you, I guess.

Standard "I got mine" mentality. You're probably a lolbertarian, too.

The best part, though, is that you honestly think you'd be better off buying marginally cheaper goods (food, raw materials, finished materials, etc.) from abroad. You'd save a few bucks, sure. But subsidizing those naughty rural leeches ensures that we maintain the infrastructure and knowledge/skill base needed to, you know, produce some things for ourselves. We can't all be engineers or hipster bookstore clerks.

Well, we can right up until we wind up at the mercy of the nations we depend on for those goods, and can't even entertain the idea of armed conflict because we no longer have the base needed to reliably produce our own food, bullets, boats, power, etc.

So shortsighted "I got mine" likely-lolbertarianism, at that.

And I hate the boonies, by the way (grew up mostly in a city, live in a city, spent some time in the middle of nowhere). With a passion.

EDIT: Also, you're ignoring the fact that not everybody chooses where they live. Which is convenient, I suppose.

Maybe we should provide subsides so people living in rural areas can watch Broadway shows. Theaters for everyone! Before there was internet, or phones or radio, there was newspapers. But you didn't see the Congress of 1796 putting a tax on papers so as to enable subsidized delivery to the middle of nowhere.

If you want to live like an urban dweller live in an urban area. If you choose instead to go for rural living don't bitch about the trade-offs you have chosen.

Well, fair enough. You have chosen to live in an urban area, so I would think it would be fair if farmers chose not to send food your way.

I do not care where you live the people of that area DO NOT fund all of their infrastructure. Period. Do you think people in NYC pay the entire cost of roadways, subways, ect? NO, the federal government kicks in fairly hefty portions of the budgets, if not most in some cases. So I am helping fund your infrastructure, why would you complain about getting that farmer that feeds you a faster net connection, so he can do it faster/cheaper. If you have to ask how that will help then you will have proven my assumptions about you true. Your arguments fall completely flat, as they do not take into consideration all the urban welfare that you receive to improve your life.

Our government could be improved massively, but in this aspect I think that it is holding the correct course.

I suppose the steel that was used to build your building, or the wood, or the stone, was all produced locally (or from local raw materials)? Where's your power come from? If in the U.S., probaby largely from coal, which I assume is mined from your back yard, and burned down the street? Or perhaps oil from the well across town? Or from a wind farm, that's located within city limits and made from that same locally-produced steel? And obviously you grow all your own food.

Guess what: this is the people of rural America, who you absolutely depend on for nearly every aspect of your lifestyle, increasing the price of the services they provide to you. Or do you really expect them to live in the dark, and in the dark ages, so that you can enjoy modern urban life?

I expect them to pay for themselves, and where necessary pass along the costs to the consumer of the products they produce. Then I can choose to either buy those goods from them or buy them from abroad (which in most cases would be cheaper absent trade barriers - another form of rural welfare.)

You know, life is more than how much money you can save -- there is such a thing as community and being altruistic. Not everyone can live in urban areas -- it's physically impossible, not everyone can have a job where they earn enough money to support themselves or their family -- also impossible. I would rather pay a little more money for locally grow foods, and help support my local businesses than save a few dollars by buying products from abroad.

You're right. If you live in a rural area and want usable internet, better pack it up, folks. That fiber in the ground isn't free, you know.

Maybe we should provide subsides so people living in rural areas can watch Broadway shows. Theaters for everyone! Before there was internet, or phones or radio, there was newspapers. But you didn't see the Congress of 1796 putting a tax on papers so as to enable subsidized delivery to the middle of nowhere.

If you want to live like an urban dweller live in an urban area. If you choose instead to go for rural living don't bitch about the trade-offs you have chosen.

Well, fair enough. You have chosen to live in an urban area, so I would think it would be fair if farmers chose not to send food your way. I do not care where you live the people of that area DO NOT fund all of their infrastructure. Period. Do you think people in NYC pay the entire cost of roadways, subways, ect? NO, the federal government kicks in fairly hefty portions of the budgets, if not most in some cases. So I am helping fund your infrastructure, why would you complain about getting that farmer that feeds you a faster net connection, so he can do it faster/cheaper. If you have to ask how that will help then you will have proven my assumptions about you true. Your arguments fall completely flat, as they do not take into consideration all the urban welfare that you receive to improve your life. Our government could be improved massively, but in this aspect I think that it is holding the correct course.

No no no no no.

The "federal government" does not help fund NYC's infrastructure. Because where exactly do you think the federal government gets the money that it chips in for NYC's infrastructure? The taxpayers of NYC.**

You may be able to find one-time examples of a city in receivership (say, New Orleans after Katrina). But, in the long run (even the medium run), urban areas are nearly always net contributors to the government, and rural areas net receivers. At both the state and federal level.

At best, many urban cores are net receivers, only because of high poverty rates. But the metro area as a whole will still be a net contributor (to the state/country) in taxes, thanks to the suburbs. Even that's iffy, though...because those urban cores will still have substantial business and property value that contributes to the tax base.

And he has a point; urban dwellers have the economic power to dominate rural dwellers. Given open markets, we could easily force people in Wyoming or North Dakota to compete on price with people in Pakistan or Sri Lanka. We could reduce their living conditions to that of, well, the kind of third-world hellholes we usually wind up invading. And, since their education systems would reflect this, they'd have little chance of escaping their lot.

Which is fine, I guess, if you're kind of a selfish jerk.

But it's funny that he keeps talking about "choice," even though none of us really have much choice in where we live before the age of eighteen or so. And, by that time you're probably already so far behind that it doesn't matter, and few (if any) choices you make can dramatically change your course. But, of course, guys like him don't see the contradiction there. They feel everybody should have to live with their choices, and ignore the impact that the choices of others (which we have no control over) have on the trajectory of our lives.

Standard "born on third, thinks he hit a triple" mentality.

Quote:

You know, life is more than how much money you can save -- there is such a thing as community and being altruistic.

Not to lolbertarians. These things you speak of are the most destructive of vices to that sort.

** - For frame of reference, 20 million federal taxpayers (well, some are kids) live in the NYC metro area. That's roughly 1/15th the entire population of the country (and with, IIRC, a higher median income to boot). Do we spend 1/15th (or more!) of our federal budget in the NYC metro area? Probably not.

I have no problem with the welfare state. But it behooves someone on welfare to not deliberatly increase the costs to the government. I'd be happy to provide for all these people if they move to Detroit or New Orleans (both of which could use the people).

Quote:

The best part, though, is that you honestly think you'd be better off buying marginally cheaper goods (food, raw materials, finished materials, etc.) from abroad. You'd save a few bucks, sure. But subsidizing those naughty rural leeches ensures that we maintain the infrastructure and knowledge/skill base needed to, you know, produce some things for ourselves. We can't all be engineers or hipster bookstore clerks.

Well it is fairly obvious that you were deprived of a proper education, at least in economics. Hint: the United States is the world's largest manufacturer (measured in industrial output).

Quote:

Well, we can right up until we wind up at the mercy of the nations we depend on for those goods, and can't even entertain the idea of armed conflict because we no longer have the base needed to reliably produce our own food, bullets, boats, power, etc.

Who were you planning on attacking? Why is it that the protectionists are always also jingoists?

Quote:

But it's funny that he keeps talking about "choice," even though none of us really have much choice in where we live before the age of eighteen or so. And, by that time you're probably already so far behind that it doesn't matter, and few (if any) choices you make can dramatically change your course. But, of course, guys like him don't see the contradiction there. They feel everybody should have to live with their choices, and ignore the impact that the choices of others (which we have no control over) have on the trajectory of our lives.

And I hate the boonies, by the way (grew up mostly in a city, live in a city, spent some time in the middle of nowhere). With a passion.

EDIT: Also, you're ignoring the fact that not everybody chooses where they live. Which is convenient, I suppose.

There are lots of ways that parents can permanently damage their children's lives, including by choosing to live in the middle of nowhere. For better or worse that is not currently defined as child abuse.

You know, life is more than how much money you can save -- there is such a thing as community and being altruistic. Not everyone can live in urban areas -- it's physically impossible, not everyone can have a job where they earn enough money to support themselves or their family -- also impossible. I would rather pay a little more money for locally grow foods, and help support my local businesses than save a few dollars by buying products from abroad.

You know, life is more than how much money you can save -- there is such a thing as community and being altruistic. Not everyone can live in urban areas -- it's physically impossible, not everyone can have a job where they earn enough money to support themselves or their family -- also impossible. I would rather pay a little more money for locally grow foods, and help support my local businesses than save a few dollars by buying products from abroad.

It is not physically impossible. Ever heard of Singapore?

Could Singapore exist in its present form if rural areas, in Asia and worldwide, did not?

Singapore is not "everyone."

Try again.

Faramir wrote:

cmacd wrote:

Standard "I got mine" mentality. You're probably a lolbertarian, too.

I have no problem with the welfare state. But it behooves someone on welfare to not deliberatly increase the costs to the government. I'd be happy to provide for all these people if they move to Detroit or New Orleans (both of which could use the people).

I know very few people who move from the city out to the middle of nowhere because, hey, it's cheap and they can live on Faramir's dime. They're generally there because either A) they were born there or B) they lacked solid economic opportunities elsewhere. Or C) both. Look at the age demographics in most truly rural areas; those than can get out, do.

And if all of them were kind enough to move to Detroit or New Orleans, who is going to mine the coal? You realize that the coal is in Montana, not Detroit, right?

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Well it is fairly obvious that you were deprived of a proper education, at least in economics. Hint: the United States is the world's largest manufacturer (measured in industrial output).

Indeed we are. And with the largest economy in the world, you'd hope so. But you'd happily see that reduced so you can get slightly cheaper steel and food.

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Quote:

Well, we can right up until we wind up at the mercy of the nations we depend on for those goods, and can't even entertain the idea of armed conflict because we no longer have the base needed to reliably produce our own food, bullets, boats, power, etc.

Who were you planning on attacking? Why is it that the protectionists are always also jingoists?

Planning on attacking? Nobody. But if you think the ability to project military power isn't important, well that'd make you either a fool or the ally of somebody that has that ability (hi, Europe). We overdo it at present, but some level is absolutely necessary to maintain economic standing. Especially when your economy is dependent on imports and exports, as most now are.

Quote:

There are lots of ways that parents can permanently damage their children's lives, including by choosing to live in the middle of nowhere. For better or worse that is not currently defined as child abuse.

And again, who is going to mine the coal? And grow the food, mine the iron, cut the timber, etc.

Or are they simply not allowed to have kids in your world? Or do you intend to pay urban dwellers, such as yourself, to move out there (without their families, since that may or may not be child abuse) to do the work, offshore oil-rig style? Which would wind up costing more than the $50-$100 a year you might spend ensuring that they have the interwebs in their homes and schools.

Well it is fairly obvious that you were deprived of a proper education, at least in economics. Hint: the United States is the world's largest manufacturer (measured in industrial output).

Indeed we are. And with the largest economy in the world, you'd hope so. But you'd happily see that reduced so you can get slightly cheaper steel and food.

Have you ever heard of comparative advantage? I recommend a good course in economics if they have universities where you live. Barring that you can use the internet I'm subsidizing to read up on it. Resource extraction (which is the majority of rural output) is not exactly the most enviable national industry.

cmacd wrote:

And again, who is going to mine the coal? And grow the food, mine the iron, cut the timber, etc.

Or are they simply not allowed to have kids in your world? Or do you intend to pay urban dwellers, such as yourself, to move out there (without their families, since that may or may not be child abuse) to do the work, offshore oil-rig style? Which would wind up costing more than the $50-$100 a year you might spend ensuring that they have the interwebs in their homes and schools.

The companies that want to mine the coal can either pay people to work offshore oil-rig style, or pay for the infrastructure needed to attract people with families. Which is cheaper depends on the circumstances of the individual mine.

Well it is fairly obvious that you were deprived of a proper education, at least in economics. Hint: the United States is the world's largest manufacturer (measured in industrial output).

Indeed we are. And with the largest economy in the world, you'd hope so. But you'd happily see that reduced so you can get slightly cheaper steel and food.

Have you ever heard of comparative advantage? I recommend a good course in economics if they have universities where you live. Barring that you can use the internet I'm subsidizing to read up on it. Resource extraction (which is the majority of rural output) is not exactly the most enviable national industry.

I'm pretty sure the Seattle area (where I live) has several universities. Go eat a dick, asshole.

EDIT: Also, I missed your response on Singapore. Are they self-sufficient on food, at least (I doubt they mine their own iron, or produce their own timber)? Or do they not even manage that? Maybe both of us need some education in economics. But only one of us is an insufferable self-centered fucktard, so I'm okay with that.